A senior Hamas official has told supporters at a rally that the war with Israel will not be over until the group's demands for a lifting of the Gaza blockade are met.

"Our fingers are on the trigger and our rockets are trained at Tel Aviv," Mushir al-Masri said at a Gaza City event.

It comes as Egypt struggles to broker a lasting truce between Israel and Hamas, with an Egyptian official saying that Gaza-based militants were refusing to compromise.

Cairo is mediating indirect talks between Israel and Hamas on extending a 72-hour cease-fire that expires tomorrow morning.

Hamas has demanded the lifting of an Israeli and Egyptian blockade imposed on the coastal territory after the Islamic militant group seized power in 2007.

Israel has said the militants must disarm first, which al-Masri insisted was out of the question.

"The war is not over yet. Our men are still in the field, manning forward positions, our fingers are on the trigger, and our rockets are trained on Tel Aviv, and Lod and beyond," he told several thousand supporters in the first mass rally since the fighting began on July 8.

"It is out of the question that the weapons of the resistance should be on the negotiating table. They have not been put on the table, and God willing, they will never be."

Al-Masri insisted fighters are "in good shape" despite the nearly month-long war and still had tunnels extending into Israel that could be used for attacks if Hamas' demands are not met.

The Egyptian security official said the Palestinian delegation's stance had hardened after the arrival in Cairo of Hamas and Islamic Jihad leaders from the Gaza Strip.

He said Azzam al-Ahmad, the leader of the delegation and the representative of Palestinian president Mahmoud Abbas, had threatened to withdraw from the talks if the two militant groups do not show more "flexibility".

He added that the delegation, which was supposed to leave Cairo today, would stay through the weekend.

The war stemmed from the killing of three Israeli teenagers in the West Bank in June. Israel blamed the killings on Hamas and launched a massive arrest campaign, rounding up hundreds of its members in the West Bank, as Hamas and other militants stepped up rocket fire from Gaza.

On July 8 Israel launched a massive air assault on the territory and nine days later it sent in ground troops it said would target rocket launchers and cross-border tunnels built by Hamas for attacks inside Israel.

Nearly 1,900 Palestinians have been killed in the fighting, three-quarters of them civilians, according to the United Nations. Israel says some 900 Palestinian militants were among the dead. Sixty-four Israeli soldiers and three civilians inside Israel have also been killed.